05 April 2023
An assessee has stocks under VAT as on 30.06.2017 which he carried forward to GST . He didnt claim ITC under GST for VAT stocks. was he required to file form Trans 1 for transfer of stock from VAT to GST even if ITC is not transferred on the same?
11 July 2024
Yes, the assessee was required to file Form GST TRAN-1 for transfer of stock from VAT to GST regime, even if Input Tax Credit (ITC) was not claimed on those stocks under GST.
Form GST TRAN-1 is used to transition input tax credits from the pre-GST regime (VAT, Service Tax, etc.) to the GST regime. It includes details of eligible duties and taxes paid on inputs held in stock or inputs contained in semi-finished or finished goods held in stock on the appointed day (transition date to GST).
Here's why the Form GST TRAN-1 is necessary, even if ITC is not claimed immediately:
1. **Legal Requirement:** As per the GST law, every registered person who is eligible to claim credit of eligible duties and taxes paid under the previous tax regime is required to file Form GST TRAN-1. This form serves as a declaration and ensures that the transition of credits is documented.
2. **Carry Forward of Stock:** The stocks held as on 30th June 2017 (transition date to GST) need to be accounted for, even if ITC is not claimed immediately. This helps in determining the eligibility for future ITC claims or adjustments.
3. **Compliance and Audit:** Filing Form GST TRAN-1 ensures compliance with GST regulations. It also provides a clear record for audit purposes, demonstrating the stock transition from the old regime to GST.
4. **Time Limit:** There was a specific time limit to file Form GST TRAN-1, typically 90 days from the GST rollout date. However, the government has extended this deadline several times due to technical glitches and other reasons. It's essential to check the current deadlines if you are filing it belatedly.
Therefore, even if the assessee did not claim ITC on VAT stocks immediately under GST, filing Form GST TRAN-1 is necessary to fulfill compliance requirements and to document the transition of stocks from the previous tax regime to GST. If the form has not been filed yet, it would be advisable to file it as soon as possible to avoid any penalties or compliance issues.
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